Eighty years after Franklin Delano Roosevelt announced the New Deal, American liberals remain enthralled by it. While conservatives pose as defenders of a lost moral order, liberals harken back to FDR’s promise to overcome “fear itself,” dedicating a broken nation to the dream of ending economic insecurity. Today, such insecurity is pervasive, a situation that conservatives contend is natural and liberals blame on right-wing insurgents who tore down the state that FDR built.

In Fear Itself: The New Deal and the Origins of Our Time, Ira Katznelson challenges the liberal narrative of defeat from without. Expanding the temporal and spatial boundaries of the New Deal, Katznelson argues that the American state that rose to global dominance between 1932 and 1952 contained within itself the racism, violence, and anti-labor politics that liberals tend to blame on barbarians beyond the gates. Where previous histories of the New Deal emphasize Roosevelt, the new bureaucracy he helmed, and the social movements that swept him into power, Fear Itself turns our attention to Congress. There, the vast majority of members were Democrats, and the majority of Democrats hailed from the Jim Crow South. According to Katznelson, these populist, racist, and deeply patriotic men were the engineers of modern American liberalism. It was southern Democrats who took the lead in the New Deal’s “radical moment,” when American government checked an unprecedented crisis of capitalism with innovative experiments in economic planning and unionization. The Solid South also led the charge against German and Japanese militarism, laying the groundwork for a successful American war effort in the years before Pearl Harbor.

But if southern Democrats cleared the way for American liberalism’s march to victory, they also locked that liberalism in what Katznelson calls a “southern cage.” White supremacy constrained the American welfare state’s egalitarian potential and fostered a bellicose, paranoid, and opaque national security apparatus. Born in the “southern cage,” the modern United States is strangely schizophrenic: it is both a “state of procedures,” in which public institutions are too weak to check private economic power, and a “crusading state,” in which public institutions dole out overwhelming violence with little democratic oversight.

While the central chapters of Fear Itself tell this startling story of the southern domination of the American state, Katznelson places his epic of disappointment within a grander — and surprisingly consoling — historical framework. He argues that the struggle that seized the world between Hitler’s rise to power and the death of Stalin was a struggle between dictatorship and parliamentary democracy. Across the globe, citizens feared that their legislatures could no longer effectively resolve the conflicts brought on by industrialization, nationalism, and total war. Confronted by this overwhelming sense of fear, the United States did not abandon its democratic traditions. Instead, congressional majorities ably responded to unprecedented perils. Insisting that the viability of parliamentary authority was the defining question of the mid twentieth century, Katznelson identifies the continuing effectiveness of the US Congress as the period’s critical achievement. And the necessary condition of this success story, he reasons, was “keeping the South inside the game of democracy.”

The New Deal’s accommodation of white supremacy was thus an essential “ethical compromise” on which depended the fate of American democracy at home and US ability to oppose the “era’s global tyrannies” abroad. Because of this ethical compromise, “human suffering on the most existential scale was sanctioned” and “black citizenship was traduced.” Yet only with this “Faustian terrible compromise could lawmaking have stayed at center stage. There was no American enabling act [on the model of Hitler’s Germany]. Productive legislation proceeded to grapple with the largest issues of the day in familiar democratic terms. In that painfully ironic way, the New Deal secured democracy, perhaps against the odds.”

Fear Itself does register the aftershocks of the southern New Deal — the inegalitarian and illiberal tendencies of the American state. But Katznelson also insists that the formation of this state was a “rejuvenating triumph,” disproving “the era’s widespread claims that representative democracy was obsolete and incapable.” As a final consolation, he asks us to take “an even longer view” and acknowledge that “lawmaking ironically shaped by the southern bloc modernized in a manner that ultimately undermined Jim Crow’s presuppositions and prospects.” However flawed, the New Deal created the conditions for “an incipient, soon powerful, movement for equal rights for blacks,” a movement that would shake — though by no means shatter — the southern cage.

Katznelson’s path-breaking narrative of the southern welfare and warfare states is sure to last. It is a deeply researched and imaginative recasting of an historical literature that has too long searched for external forces to explain the New Deal’s limitations. But the intended moral of Fear Itself, that the American state crafted by southern domination was necessary lest democracy fall to dictatorship, is the product of rhetorical excess and unexamined political assumptions. Ironically, it is Katznelson’s adoption of the language of fear and the logic of emergency, so often used to justify dictatorship, that leads to his portrayal of the southern New Deal as the only viable path the United States could have taken out of its mid-century crisis.

Contrary to Fear Itself’s dramatic framing, the choice that Americans faced in the 1930s and 1940s was not between democracy and dictatorship. Katznelson himself acknowledges this fact time and again, often a page or a sentence after suggesting the opposite. Setting the scene in the early 1930s, for instance, he lists in quick succession the Japanese invasion of Manchuria, the growth of the Soviet gulag, the proliferation of German concentration camps, and American economic, environmental, and racial upheaval, concluding that “threats to liberal democracy were proliferating in a way that was without precedent” and that “the pressures on liberal democracy did not stop in in the second half of FDR’s first term.” But a caveat follows: “Of course, it would be an exaggeration to state that the United States was on the verge of joining the democratic collapse that was spreading like a domino effect during the 1930s.” The next sentence caveats the caveat: “But there were plenty of dangers at home and a continuing atrophy for liberal democracy abroad.”

The next paragraph repeats this pendulum-like cadence, beginning with a warning: “The United States possessed many of the same features that Hannah Arendt was soon to associate with the rise of totalitarianism.” Katznelson then ticks off “racism as a robust ideology, imperial expansion, and the control of subject populations . . . ethnic admiration, even loyalty, to German and Italian fascism, ideological attachments to the USSR to the point of spying,” and disregard for civil liberties. Not only do such lists obscure important distinctions — the threat to democratic governance posed by pro-Mussolini Italian-Americans is simply not comparable to the unremitting oppression visited on blacks by American society — their total significance must inevitably be scaled back. Thus, Katznelson follows the catalog of horrors with a considerably understated acknowledgment: “American democracy may not have risked the same apocalyptic fate as the Weimar Republic.” The next sentence: “Nevertheless, there was a real set of pitfalls.” The differences between American and German political economy and culture in the 1930s are too severe for this kind of linguistic maneuvering.

As generations of American historians have concluded, neither fascism nor communism was in the cards for the United States. For all his sharp talk, Katznelson does not seriously contest this conclusion. As he explains in his chapter on US military mobilization during World War II, “at issue was not whether the United States would be a dictatorship, but rather, what kind of democracy it would elect to possess during and after the war.” Most tellingly, Fear Itself provides no sustained analysis of what dictatorship in the United States might have looked like.

The book teems with contemporary reports about an increasingly powerful executive branch under FDR. But these expansions of executive authority, as Katznelson details, were designed and approved time and again by overwhelming majorities in Congress and the Electoral College. By contrast, the National Socialists never garnered more than 38 percent of the German federal vote before Hitler was appointed Chancellor; even after the Nazis had effectively seized power in March 1933, they could not muster an electoral majority.

Nor is it clear why democratic theory should preclude a strong executive. It is simply hyperbole to write that “in placing the recovery program almost entirely in the president’s hands, Congress did flirt with what might be thought of as a functional Enabling Act,” the German legislation that licensed Hitler’s emergency reign. Neither the sensational rhetoric of the New Deal’s critics nor general tendencies toward administrative centralization can substantiate fearful analogies between the Roosevelt regime and one-party rule in Soviet Russia or Nazi Germany. A serious comparison of the American, German, and Russian administrative states would require an analysis of lines of authority, decision-making procedures, methods of legitimation, and the use of violence to compel assent. The incoming president of the Social Science Research Council, Katznelson is a brilliant political scientist as well as an insightful historian, and he could provide such analysis. The results, however, would be less sensational than the rhetoric of Fear Itself demands.

FDR-as-dictator aside, Katznelson at times suggests that the United States scored a moral victory simply by “keeping the South in the game of democracy.” But the alternative to this outcome remains unspoken. Was there any serious threat of the South abandoning democracy beyond the extent to which it already had by enforcing apartheid? While Katznelson does note that “demagogic figures like Father Charles Coughlin and [the Southerner] Huey Long appealed to many millions,” he never makes the case that such populist leaders posed a real challenge to the Union. Precisely because of the South’s vise-like grip on the Democratic Party, it is difficult to imagine circumstances in which the region would have sought to destabilize the country’s well-functioning white supremacist political system.

If the 1930s and 1940s were not about whether the United States would abandon its relatively democratic form of government, what were they about? The careful case studies that make up the last two thirds of Fear Itself clarify the real issue: how would American democracy respond to the failures of capitalism and the fascist and communist states that these failures helped to produce? In deftly answering these questions, Katznelson offers an innovative account of the United States’ recreation of capitalism and war.

The economic collapse of the early 1930s was the most severe crisis of capitalism in world history. With the Great War’s bloodshed in recent memory and the world’s first socialist state looming to the east, Western countries faced what historian Charles Maier has called the twin challenges of “legitimation” and “production.” On the one hand, these nation-states had to justify the hierarchy that separated labor from capital, factory and farm workers from the technology necessary to make their toil more productive and less back-breaking. But even if Western governments could convince their working populations to accept the bargain of “increasing satisfaction of material wants” in return for the maintenance of capitalist hierarchy, these governments still “had to be able to pay up” — they had to deliver satisfaction in the form of an ever-increasing stock of products and markets for their consumption.

This balanced escalation of production and consumption depended largely on the easy flow of money and goods. Free trade, however, required international economic cooperation, and such cooperation was sorely tested by at least four factors: enormous debt and reparation payments from the recent war, military insecurity, the political necessity of keeping wages and public spending high to prevent domestic unrest, and rigid monetary policy. Together these factors broke the economic ties that bound the capitalist West. The Great Depression’s rolling crisis of underconsumption and unemployment followed. Stalinist Russia was partially insulated from the collapse, having launched a massive project of industrialization in 1929 that put the nation to work while sentencing millions to starvation. Germany turned to Hitler, whose racial messianism, rearmament policy, and program of agricultural relief united all sectors of the economy in a fearsome coalition dedicated to national expansion.

In the United States, the Great Depression swept Franklin Roosevelt and the Democratic Party into power after twelve years of Republican rule. The early years of FDR’s first term saw a flurry of experiment with economic planning that historians have often labeled the “First New Deal.” Such new forms of executive power as the National Recovery Administration and the Tennessee Valley Authority were established by Congress but operated as partnerships of presidential appointees, local officials, and private representatives of labor and capital. These public-private coalitions made wide-ranging decisions about the targets of investment, the price of goods, and the levels of wages paid and hours worked. Such programs faced resistance in American courts, where the corporate bar challenged them as unconstitutional delegations of authority by Congress to the President and as violations of individual economic freedom.

Despite judicial setbacks, Congress continued to experiment, passing American democracy’s boldest challenge yet or since to capitalist hierarchy: the National Labor Relations Act of 1935. The NLRA, or the Wagner Act, created the legal conditions for large-scale unionization in the United States, expanding the labor rights included in earlier economic planning legislation. Fear Itself places this revolution in labor law at the center of a larger “radical moment” when federal and state governments, industrialists, and a newly potent labor force managed the economy for the common good, understood as the good of the American worker.

Southern Democrats were in the vanguard of this radical push for economic planning and labor rights, but they also put their illiberal stamp on it. The southern economy depended on low-wage black labor, and so even as Democrats checked the power of capital, they included space for a powerless underclass within the framework of the newly progressive national state. Southerners made sure that economic planning and labor rights legislation excluded agricultural and domestic workers, who were predominantly black. Planning programs were also tailored to place as much control as possible in the hands of local elites who could enforce regional patterns of racial oppression.

Despite these efforts to exclude black workers and secure local control, the blueprint of economic planning and labor militancy created by southern Democrats soon threatened to transform their region’s illiberal political economy. The new industrial unions empowered by the Wagner Act began to integrate black and white workers throughout the country; the Congress of Industrial Organizations, in particular, turned its sights on the poorly organized South as an untapped source of labor power. Meanwhile, a rapidly expanding federal bureaucracy promised to challenge southern efforts to insulate a racialized, low-wage labor force from national manpower planning. Sensing their inability to control the progressive forces they had unleashed, southern Democrats turned against reform.

In 1938, they successfully watered down the Fair Labor Standards Act, preventing Washington administrators from directly regulating wages and hours, and insulating swaths of southern industry from the reach of the law. Southern congressmen also joined forces with Republicans in launching an investigation of the National Labor Relations Board, the vanguard of pro-labor sentiment within the federal bureaucracy. Congressional investigators charged the Board with class warfare and communist collaboration, pioneering a political language that would help secure domestic support for the coming Cold War and hamstring the American welfare state up to the present day.

Even as southern Democrats were undermining Washington’s welfare powers in the late 1930s, they took the lead in demanding a strong national response to Nazi aggression. As Katznelson argues, the South was remarkably resistant to overtures from German fascists, who had hoped to sustain American neutrality by appealing to the country’s racism. Beyond a general culture of militant patriotism, southern support for free trade, rooted in the region’s reliance on agricultural exports, was a major source of its anti-fascism. Another was the welcome influx of federal dollars to the South that a military mobilization would bring. It was thus the American advocates of white supremacy who spearheaded the repeal of neutrality legislation, the institution of the United States’ first peacetime draft, and the launch of a massive program of industrial rearmament — all before the country at large was united behind Roosevelt’s call for “the final destruction of the Nazi tyranny.”

The mobilization of America’s arsenal also provided southern Democrats with the means to harmonize their inveterate racism and their economic populism. In the wake of the radical moment, the challenge that Jim Crow politicians faced was how to provide security for white workers while ensuring that the federal government lacked the power to meddle with racial hierarchy and local autonomy. The South’s answer was strikingly modern: fiscal policy. Rather than intervening directly in the contest between owners, workers, and local governments, the state would now set general targets for growth, manipulating federal spending, taxation, and debt to maintain prosperity and ensure its relatively equitable distribution. This fiscal New Deal, however, could only truly come into its own during World War II.

Then, the federal government rapidly expanded its tax base and happily took on debt to finance a popular and exigent struggle against fascism. While US entry into World War II launched a new phase of emergency planning, a boom in union membership, and an increase in civil rights activism, its biggest economic legacy was fiscal. After the war, military spending backed by debt and taxation would remain the United States’ preferred mode of economic regeneration. This new American fiscal state was progressive to the extent that it taxed the well-to-do in order to soften the effects of economic turbulence on the less affluent. But it also signaled the nation’s retreat from the more ambitious political-economic vision briefly glimpsed during the pre-war period: in this lost recreation of capitalism, an alliance between an activist bureaucracy and a powerful, racially integrated labor movement would have contested social and economic inequality industry by industry, state by state, town by town.

Southern Democratic power in Congress reached its peak in 1950, and Katznelson shows how the South continued to mold American capitalism and foreign policy during the early Cold War. Under the watchful eye of Jim Crow politicians, an unprecedented burst of foreign aid and military spending, the construction of a massive nuclear arsenal, and the purge of leftists from government agencies, unions, and civil rights organizations set the stage for the second half of the twentieth century. Anti-communism not only justified the “crusading state” abroad — a state that resurrected Europe while embroiling itself in postcolonial conflict across the globe — but the “state of procedures” at home, a state susceptible to the disproportionate influence of private wealth and reluctant to correct enormous inequalities in the well-being of its citizens.

Katznelson concludes on an upbeat note: the flawed, “Janus-faced” state of southern design also provided the platform for the civil rights revolution of the 1950s and 1960s. Once again, southern plans backfired: World War II had produced a militant generation of black veterans and industrial workers, and legal critiques of state power intended to restrain New Deal administration laid the basis for assaults on formal segregation. Yet this dialectical story in which Jim Crow digs his own grave obscures the costs of conducting civil rights reform in the shadow of the Cold War.

The “state of procedures” that emerged from racist and anti-communist efforts to check unionization was powerful enough to end officially mandated racial discrimination. But the American state has faltered in the face of less formal modes of racial subordination: residential segregation, pervasive health and wealth gaps, a two-tiered and two-toned criminal justice system. And while the defeat of racial and economic democracy in the 1940s most grievously affected African Americans, it continues to determine the life choices and political visions of all Americans. The United States remains locked in its southern cage.

If the mid-century dominance of southern Democrats was truly essential to the defeat of Hitler, the avoidance of a third world war, or the rescue of American democracy, then the conditions of our present confinement might be easier to bear. But Katznelson does not make this case. As he notes, most of the critical decisions of the 1930s and 1940s, particularly the decision to go to war against Japan and Germany, were supported by overwhelming majorities in the country and in Congress. While total opposition by southern Democrats could have worsened the Great Depression and slowed military mobilization, it remains unclear what set of factors would have sparked such a southern strike, or what alternative coalitions might have been forged during the New Deal to circumvent southern dominance.

Fear Itself is an indispensable starting point for scholars and citizens who wish to explore the possible futures that the southern New Deal precluded. What is peculiar about the book is its implication that no alternative response to crisis was ever available. In a groundbreaking essay written toward the end of the Reagan era called “Was the Great Society a Lost Opportunity?” Katznelson surveyed this same terrain and reached a somewhat different conclusion. Then, he argued that the possibility of American social democracy persisted until the late 1940s. It was only a contingent series of events that enabled southern Democrats, moderate northern Democrats (a group Fear Itself unfortunately ignores), and Republicans to close the door on a more robust union movement and a more equal America. What Katznelson has added in Fear Itself is an emphasis on southern power and a sense of tragic inevitability. Menaced by dictatorship on all sides, American society was compelled to capitulate to the demands of Jim Crow. Because the world’s only hope lay in the survival of democratic legislatures, the reconstruction of American capitalism had to proceed along the inegalitarian lines laid down by a white supremacist Congress. Although the racial and economic injustice that persists as a result is unfortunate, we can console ourselves with the fact that such injustice was produced in a roughly democratic fashion.

In the twenty-five years between Katznelson’s earlier essay and Fear Itself, the world changed. Most significantly, the Soviet Union fell, ushering in a decade of prophecy about the final victory of capitalism and the end of history. Although many read September 11 as a refutation of the latter thesis, a resurgence of religious fundamentalism has not seriously challenged the liberal conviction that free-market capitalism, more or less unequal, more or less unjust, is the economic system that best harmonizes with democratic hope. Fear Itself’s tragic acceptance of the state that the southern cage made is a product of this conviction. It is the definitive account of the New Deal for an age that may be passing. Thanks to Ira Katznelson’s achievement, the next great history of mid-century America can ask a new set of questions: During the Great Depression and World War II, were there countervailing forces capable of contesting the dominance of southern democracy? Today, are there forces capable of overcoming the legacy of that domination?